The Quick Read: The lender sets a maximum loan-to-value cap for the cabin, and your down payment is whatever the cap leaves uncovered, then the lender checks that the cabin’s rental income covers the payment and that your credit, reserves, and property type all fit the program. Short-term rental cabins sit in a tighter leverage tier than long-term rentals, so plan on more cash.
- On a purchase, short-term rental (STR) leverage typically tops out at 75% LTV, which means about 25% down on the strongest files.
- On a refinance or cash-out against STR collateral, the ceiling is typically 70%.
- Expect a 640 minimum credit score and about 12 months of hosting or landlord experience.
- A bigger down payment can lift your coverage ratio, but it never erases credit, reserve, or property-eligibility rules.
- Log homes, manufactured homes, and barndominiums are not offered in the network’s DSCR programs, however strong the bookings.
A cabin is a strange asset to finance. Its income swings with the season, its comparable sales are thin, and it often sits far from the nearest town. A lender sizing your cash-to-close has to account for all of that. This guide walks through the order lenders follow, what each step does to your cash, and where cabins break the usual rules.
Short-Term Rental Calculator
Run the STR numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 22, 2026
Prefilled with starting assumptions — enter your nightly rate, occupancy, taxes, and insurance for a more accurate picture.
Short-term rental income is documented with a 12-month history or a market data report. Program parameters update from Lendmire’s centralized guideline source.
As of Oct 22, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Nightly rate, occupancy, taxes, and insurance are editable estimates. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Key Terms Defined
Down payment is the part of the purchase price you pay in cash instead of borrowing. It equals the price minus the loan.
LTV (loan-to-value) is the loan amount divided by the property’s value. NAR explains the formula and shows that an 80% LTV means a 20% down payment. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
DSCR (debt service coverage ratio) is the property’s rent used for lender review divided by its monthly obligation. A ratio of 1.00 means rent exactly covers the payment.
PITIA is principal, interest, taxes, insurance, and association dues. It is the full monthly obligation the ratio measures against.
STR (short-term rental) is a property rented by the night or week, usually through a booking platform.
Reserves are liquid funds you hold after closing, usually counted in months of PITIA.
What Does “Sizing” the Down Payment Actually Mean?
Your down payment is the mirror image of the lender’s maximum LTV. If the cap on your file is 75%, you put down 25%. The lender sets that cap from the risk of the file, and no formula hands you a fixed percentage. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The Consumer Financial Protection Bureau notes that a larger down payment lowers your LTV. A lower LTV is less risk for the lender, which is why leverage caps tighten when a property looks riskier.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. A cabin you plan to rent nightly fits that box. A cabin you plan to use yourself most weekends does not.
Across the wholesale network Lendmire works with, most long-term rental purchases land at 75% to 80% LTV, and select high-leverage programs reach 85% with a score around 700 or better. STR cabins sit lower. That gap is the whole story of this article. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
The Sizing Sequence, Step by Step
Lenders work through the same checks in roughly the same order. Each step can move your cash requirement.
1. Property eligibility. The lender first confirms the cabin is a property type the program allows. If it fails here, no down payment fixes it.
2. Income path. The file picks how rental income will be proven. Options include 12 months of actual booking history, an appraiser’s STR analysis, a property-manager statement, or a data-provider projection when the property has no history.
3. Income haircut. The lender discounts gross STR income before it becomes qualifying income, because nightly revenue is volatile. The discount varies by program.
4. Leverage cap. The lender assigns the maximum LTV for this property, credit score, and coverage level. This sets the minimum down payment.
5. Appraisal. The appraisal supports value, and LTV applies to the lower of price or appraised value. A low appraisal raises your cash requirement.
6. Coverage test. The lender divides qualifying income by PITIA. A bigger down payment shrinks the loan and can lift this number.
7. Credit and reserves. Your score and liquid reserves get checked against the tier.
The strongest files clear two tests at once: enough equity and enough rental coverage. More cash helps the second test, but it never replaces the first.
From Leverage Cap to Down Payment
The conversion is simple. Subtract the LTV cap from the full purchase price or appraised value, and the remainder is the equity you leave in the property.
| Transaction | Typical STR LTV ceiling | Equity you leave in |
|---|---|---|
| Purchase | Up to 75% | About 25% down |
| Refinance | Up to 70% | About 30% equity |
| Cash-out | Up to 70% | About 30% equity |
Standard long-term rentals run higher. A 70% cash-out ceiling applies to short-term-rental collateral, while a 75% ceiling applies to standard rentals. If your cabin leans on bookings rather than annual leases, expect the lower numbers. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Cash-out has no down payment, because you already own the property. The equivalent is the equity the lender requires you to keep. A cabin refinance therefore returns less cash than the same equity would on a standard rental, which matters if your plan is to recycle capital into the next deal.
How a Lender Measures Income on a Cabin
STR income is the hardest number on the file, so lenders treat it with the most care. Three things shape it.
Documentation. Booking history from a platform, deposit records, or a property-manager statement can all serve as proof. A lender usually expects about 12 months of hosting or landlord experience from you, even if the specific cabin is new to you. When the cabin has no history, a market projection fills the gap.
The haircut. Gross revenue is not qualifying income. Lenders discount it for vacancy and operating swings, and the discount varies by program. Compare programs on the qualifying figure, never on the gross.
Thin comparables. Remote cabins have few comparable sales and few comparable listings. Appraisers make larger adjustments, and a market projection built on a handful of listings can overstate or understate income. A seller’s booking history can help here.
One more point on appraisals. The standard rent schedule form (Form 1007) covers one unit, and the 1025 covers two to four. Fannie Mae’s appraiser guidance describes the 1007 as an estimate of monthly market rent, not nightly income. DSCR loans are not agency loans, but the forms are widely used in the appraisal. So the appraisal alone rarely proves STR income, and a separate STR analysis or booking history usually fills that gap.
Worked Example: One Cabin, Three Down Payments
Run the numbers on a modeled cabin. These inputs are assumptions for illustration, not market data. Assume the cabin’s qualifying income, after the lender’s haircut, gives coverage of about 1.05x at 75% LTV. Taxes and insurance stay the same in every case. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
| Down payment | LTV | Modeled coverage |
|---|---|---|
| About 25% | 75% | About 1.05x |
| About 30% | 70% | Near 1.10x |
| About 35% | 65% | Mid-1.1s |
Two lessons come out of this table.
First, extra cash helps, but with diminishing returns. Coverage rises less than the loan shrinks, because taxes, insurance, and association dues do not fall when you borrow less. Only the principal and interest piece moves.
Second, the example clears 1.00 at every level, yet none of these rows means the cabin makes money. DSCR compares rent to PITIA only. Repairs, vacancy, utilities, cleaning, management, and capital replacements all sit outside the calculation. Clearing the ratio is not the same as positive cash flow.
Insurance deserves a mention here. A cabin rented nightly needs a policy that fits short-term rental use, and that policy usually costs more than a landlord policy on a long-term rental. A higher premium lowers coverage, which can push your required down payment up. Get a real quote before you set your offer.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
What Pushes the Number Up
Several things tighten leverage on a cabin file. Each one is subject to lender guidelines.
- Thinner coverage. The weaker the ratio, the lower the cap. A few lenders will take a file below 1.00, but leverage and terms adjust, which means more cash down.
- Lower credit. A 640 score is the typical STR minimum. Higher scores open better pricing and sometimes better leverage, though not always both.
- Larger loans. Standard programs reach up to $3,000,000, and bigger balances usually bring tighter terms and heavier reserves.
- Seasonality and thin comps. A cabin whose income bunches into a few months looks riskier on paper.
- Acreage. Land beyond what the lender will count toward value may be carved out of the appraisal, which raises your cash requirement.
- Weak property documentation. A cabin with no booking history and little market data gets a more conservative read.
A common misconception says DSCR means 20% down, full stop. In practice the cap moves with property type, credit, coverage, and loan size. STR cabins often sit in a tighter tier than the same investor’s long-term rental.
Where the Rules Break: Edge Cases
Ineligible cabin types. Log homes, manufactured homes (single- and double-wide), and barndominiums are not offered in the network’s DSCR programs. Strong rent does not change that. Check the construction type before you fall in love with the listing.
Personal use. A cabin you use yourself does not fit a business-purpose loan. A second-home loan is the alternative, but it requires real personal use, and rental income cannot help you qualify on it. If you are refinancing a second home into a DSCR loan, expect to sign a business-purpose certification, and expect personal use to generally stop.
Bank statements. Personal bank statements do not replace property income on a DSCR loan. The cabin’s own booking deposits can corroborate platform records, but that is a different job.
Coverage below 1.00. The 1.00 mark is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Either way, a larger down payment is the usual way to rescue a thin ratio.
No-ratio files. These are available only through select lenders, generally for borrowers who already own a primary residence. They are a different product with different pricing and leverage.
Total Cash to Close, Not Just the Down Payment
The down payment is one line in your cash plan. Plan for these as well:
- Closing costs, including the appraisal and any STR analysis.
- Reserves, commonly around six months of PITIA. Requirements vary by lender, leverage, loan size, and transaction type, and loans above $1,500,000 typically step up to about nine months.
- Furnishing and setup, which no lender will count toward your down payment.
- A cushion for the first slow season.
Tax treatment varies; consult a qualified professional.
If Your Coverage Is Thin
You have four levers, and they work best in combination.
1. Put more down. Lower the LTV and the ratio improves, as the table showed.
2. Change the income basis. If you bought on a projection, 12 months of actual history may tell a stronger story, or a weaker one.
3. Lower the price. A smaller loan on the same income lifts coverage and trims cash needs.
4. Ask about other structures. Extended terms and interest-only periods are available through select lenders in the network. They reduce the monthly obligation, though terms are adjusted accordingly.
Know the trade-off before leaning on any of these. A projection that overstates income can produce a deal that is reviewed on paper but underperforms in the real world. Size the cabin on conservative bookings, not the best summer you can imagine.
Documents to Gather
Pre-assembling these keeps the file moving without back-and-forth.
- Booking or payout history for the past 12 months, if the cabin already operates as a rental.
- A property-manager statement, if one runs the unit.
- Proof of your own hosting or landlord experience.
- The purchase contract and, for refinances, current mortgage statements.
- An insurance quote written for short-term rental use.
- Entity documents if you plan to hold the cabin in an LLC, subject to lender program eligibility.
- Bank statements showing your down payment and reserves.
Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Frequently Asked Questions
How much do I need down on an STR cabin purchase?
Typically about 25% on the strongest files, since STR purchase leverage tops out at 75% LTV. Weaker coverage, lower credit, or an unusual property can push the requirement higher. Every file is reviewed individually, subject to lender guidelines.
Can I buy a cabin with less down by using a higher-leverage program?
Select high-leverage programs reach 85% LTV with a score around 700 or better, but those apply to standard rental purchases. STR collateral is tighter. Treat the 75% purchase ceiling as the planning number for a cabin. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Does a bigger down payment guarantee approval?
No. It lowers your LTV and can raise your coverage ratio, but credit floors, reserve rules, and property eligibility still apply. Lenders review the property, your profile, and the program together.
Can I refinance a cabin I already own and pull cash out?
Often yes, up to about 70% LTV against STR collateral, with a 1.00 coverage floor on refinances and a 640 minimum score. Seasoning of around six months is the common expectation. The cash you receive is smaller than on a standard rental, where the cash-out ceiling is around 75%.
Can I use the cabin myself and still use a DSCR loan?
Not as the basis for the loan. DSCR is a business-purpose product, so regular personal use conflicts with it. A second-home loan fits personal use better, but rental income cannot help you qualify there. For more on how the same sizing works on small multifamily, see Lendmire’s piece How a DSCR Lender Sizes Down Payment on a 2 to 4 Unit.
Where to Go From Here
The complete DSCR loans guide covers coverage ratios, credit tiers, and reserves in more depth. If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire is a mortgage broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Reach the team at 828-256-2183. Programs change, and every file is underwritten individually.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
3. Fannie Mae: Appraiser Update
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Put Less Down on a Condo 40-Year DSCR Loan? · How to Hold a DSCR Lender to Locked Terms as a First-Time Rental Buyer · DSCR Portfolio Closing Requirements for a Package With Turnover
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.